China vows ‘firm and forceful’ response to US tariffs threat

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China’s government has vowed to take “firm and forceful measures” as the US threatened to expand tariffs to thousands of Chinese imports such as fish sticks, apples and French doors, the latest salvo in an escalating trade dispute that threatens to chill global economic growth.

Chinese ministers gave no details, but they have plenty of options to retaliate that could extend beyond additional tariffs on US imports.

There are fears that Beijing could attempt to disrupt operations of American car makers, retailers and others that see China as a key market.

The spiralling conflict stems from Washington’s complaint that Beijing steals or pressures companies to hand over technology and concerns that plans for state-led development of Chinese champions in robotics and other fields might erode American industrial leadership.

Imported US goods
China has vowed to retaliate in its escalating trade war with the US (AP)

The abrupt escalation is “totally unacceptable”, the Chinese commerce ministry said.

It added Beijing would take unspecified “necessary counter-measures” to protect its “core interests”.

Asked what Beijing would do, foreign ministry spokeswoman Hua Chunying gave no details but said: “We will take firm and forceful measures.”

The USTR, the federal agency that oversees international trade policy and negotiations, said it is responding to Beijing’s decision to retaliate instead of changing its policies.

Flat screen TVs
A woman and a child pass Chinese brands of flat screen TVs on display at a hypermarket in Beijing (AP)

The USTR will accept public comments on the latest round of tariffs and hold hearings on August 20-23 before reaching a decision after August 31, according to a senior US official.

The first US tariff list focused on Chinese industrial products, an attempt to reduce the direct impact on American consumers.

The new list includes vacuum cleaners, furniture, car and bicycle parts, French doors and plywood. It left untouched US-branded smartphones and laptop computers.

That “will hit the Chinese export sector hard”, said Rajiv Biswas of IHS Markit in a report.

China imports far less from the US than America does from China. However, Beijing has other ways to disrupt American companies’ operations. Regulators can deny or cancel licences or launch lengthy tax, environmental or anti-monopoly investigations.

The conflict is “far from over”, warned Hannah Anderson of JP Morgan Asset Management in a report, “and the impact will be global”.

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